Tuesday, May 21, 2024 May 21, 2024
86° F Dallas, TX
Advertisement
Commercial Real Estate

What Commercial Real Estate Leaders Can Learn From an Economic Downturn

Difficult economic times allow you to prepare for the good times, says Citadel Partners Managing Partner Scott Jessen.
|
Image
Justin Terveen

Little did I know what was coming when I joined the commercial real estate industry in 1985, just before we started feeling the impact of the newly enacted Tax Reform Act of 1986. This would be the beginning of one of the toughest downturns North Texas has ever seen. The office and industrial markets were overbuilt, foreclosures were happening daily, and the FDIC and the RTC would soon be the largest landlords in North Texas.

Image
Scott Jessen

Everybody went into survival mode. I was tending bar at the Premier Club on weeknights and at the Scoreboard in Addison on Saturday and Sunday to support my weekday real estate habit.

I remember thinking, “What in the hell did I get myself into? Will I ever make it in this business?” Little did I know I would learn some of the best lessons of my life from this first downturn experience, as well as all the subsequent downturns since. 

Lessons:

Expand your network

You’re not alone, and you will learn from those you meet. I played a lot of hoops at the Premier Club back then and met a ton of people who went on to have incredible careers, i.e. Mark Cuban, Scott Lynn, Mark Miller, Bob McNelis, Randy Heady, Mark Harrison, and many others. These relationships will serve you well.

Work harder and smarter to sharpen your knife

It is all about experiencing these hard times that allow you to prepare for the good times (that’s what I mean by sharpening your knife). Take the time to go learn a vertical really well; I mean, know it better than anybody. For me, that was learning the Richardson/East Plano market. Don’t just take my word for it, many of the top brokers in the North Texas market have done the same thing over the years. Phil Puckett created his dashboard of the Dallas CBD during the downturn of the tech wreck in 2000; he became “the guy” in the Dallas CBD. Dave Anderson identified every tract of available dirt in each industrial market and became “the guy” for developers who were looking for sites to build on.

Convert the knowledge

It was Craig Wicker who first made me aware of the importance of knowing your market. He also told me I needed to tell everyone in my market about what I knew. My problem was turning that knowledge into money. I remember Randy Church telling me, “I was a broken wealth of knowledge.” He was not being mean, but he was right. I had to learn how to use the knowledge to create value for prospects and clients. Getting market knowledge is the first thing a new broker should do when getting into the business. Converting takes a little more time and experience, but that can be expedited by bringing a more experienced broker with you to meetings. There are few experienced people who will turn down an invitation to attend a new meeting.

Never too old to learn

I did not get into the business until I was 27, and it wasn’t until I turned 37 that I learned some of the above. I admit that I was clearly a slow study. Having good mentors is key, and if you do not have one— get one. Whether you are 27, 37, or 57, it is never too late to do some of the above—you just have to start.

This CRE Opinion piece was written by Scott Jessen, managing partner with Citadel Partners. He leads the company’s industrial group.

Author

Scott Jessen

Scott Jessen

View Profile
Advertisement